theScore announced on Tuesday that it has received C$40 million from Fengate Asset Management to develop its mobile sports betting services.
On Tuesday (September 3), mobile sports media and entertainment company Score Media and Gaming (theScore) (TSXV:SCR) received a windfall investment of C$40 million from Fengate Asset Management, a multibillion-dollar investment manager.
Fengate will purchase a C$40 million convertible unsecured subordinated debenture of theScore at an 8 percent annual interest rate, with the debenture scheduled to mature on August 31, 2024.
“theScore’s unique ability to integrate sports betting into their industry-leading mobile sports media platform makes this investment a strong addition to our growing private equity platform investing across North America,” said Justin Catalano, managing director and group head of private equity at Fengate.
Funding will be directed towards building theScore’s mobile gaming and media platform. theScore’s mobile betting app is one of the largest in Canada, with millions of users per month. The company plans to expand its sports betting app service, including launching a sportsbook in the US.
“theScore is focused on becoming a leader in mobile sports gaming in North America and this strategic investment significantly enhances our ability to execute on this plan,” commented John Levy, founder and CEO of theScore.
“Fengate is recognized as a highly respected and experienced investor across North America, with significant expertise in the gaming industry,” Levy continued. “(It is) the perfect strategic investment partner as we launch our best-in-class mobile sportsbook in the United States.”
The deal is anticipated to close on Thursday (September 5), pending approval from the TSXV.
Online sports betting has been growing at a considerable clip due to recent regulations and mobile development.
In a watershed ruling last year, the Supreme Court of the US voted to legalize sports betting throughout the country, allowing the activity to be authorized on a state-by-state basis. Nevada was an exception, as sports betting and sportsbooks have been legal there since 1949.
Since then, many states have legalized sports betting, including New Jersey, Pennsylvania, New Mexico and Mississippi.
In fact, New Jersey reported US$63.1 million in total gaming revenue between January and March of 2019. With less than a year since legalization, sports betting now accounts for over 8 percent of its total state gaming revenues.
In Canada, online sports betting is in a gray area. In order to operate, sites are required to have a registered gambling license from the government.
theScore also announced on Tuesday that it has launched its mobile sportsbook in New Jersey. Built for Android and iOS devices, theScore Bet can link up with the company’s original app, theScore, to store unique data on a user’s bets, favorite teams and games.
According to Zion Market Research, by 2024 the worldwide sports betting market is projected to reach US$155.49 billion. Online betting is anticipated to drive this growth as awareness increases.
Shares of theScore opened at C$0.78 on Tuesday, rising 3.85 percent to close at C$0.81. Year-to-date, shares of theScore have risen over 135 percent.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.